FY 2007-2012 Department of State and USAID Strategic Plan
Bureau of Resource Management
May 2007
Report

In his 2006 State of the Union Address, President Bush said, "We will choose to act confidently in pursuing the enemies of freedom—or retreat from our duties in the hope of an easier life. We will choose to build our prosperity by leading the world economy—or shut ourselves off from trade and opportunity."

As the world's largest economy and trading nation, the United States derives enormous benefits from a stable, resilient, and growing world economy. In 2005, total U.S. trade accounted for more than one-quarter of the Nation's income, while exports alone provided 20 percent of its economic growth. One out of every three acres of U.S. farmland is devoted to exports, as is one out of six jobs in manufacturing. Foreign investment in the United States is estimated at more than $12 trillion—roughly equal to one year of the U.S. economy's output—while the value of U.S.-owned assets abroad is only modestly lower.

Helping poorer countries share in the virtuous circle of development and achieve rapid, sustained, and broad-based growth is also in U.S. vital national security interests. Economic growth is essential to allow countries to reduce and eventually eliminate extreme poverty. Growth also generates the resources countries need to address a wide range of other development challenges, such as poor health and inadequate education. Countries that prosper tend to be more tolerant, more willing to settle disputes peacefully, and more inclined to favor democracy.

The U.S. Government's goal is rapid, sustainable, and broad-based economic growth, both domestically and internationally. To address the development challenges of the future, we must ensure that we lay the groundwork for future growth and support sustainable use of natural resources. We will work to ensure that our efforts effectively target women because growth will lag without the full participation of women.

Together with our coalition partners and the international community, we will support economic growth and development in Iraq and Afghanistan—two critical countries on the front lines in the war on terror—by coordinating reconstruction assistance, negotiating debt relief, and facilitating access to international markets.

We will continue to help integrate developing nations into the global economy. Coordination with the Millennium Challenge Corporation (MCC)—which has pioneered a revolution in development assistance by focusing our assistance on countries that govern justly, invest in their people, and foster economic freedom—ensures a comprehensive U.S. Government support of economic development activities.

In the years ahead, we will build upon our diplomacy and development assistance successes in promoting economic growth and prosperity in opening markets, pursuing ambitious trade and investment agendas, assisting reform-minded governments to build the capacity to implement and sustain economic reforms effectively, multiplying development efforts through private sector participation and recipient country accountability, supporting U.S. businesses through advocacy, and helping areas rebuild from war, terrorism, and natural disasters.

Strategic Priorities

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Strengthen Private Markets: The President's 2006 National Security Strategy notes that "a strong world economy enhances our national security by advancing prosperity and freedom in the rest of the world." Working with other agencies, foreign governments, the private sector, and multilateral institutions, we will support free markets and free trade to unleash the power of the private sector to promote economic growth and prosperity in the United States and abroad.

Private capital flows are an important resource for development that can complement official development assistance. Investors, however, wisely avoid unpredictable investment environments. For that reason, we will work with other nations and international organizations to assist countries committed to building the capacity, institutions, and legal systems vital to enable economic good governance and other related reforms to take root. Programs in these areas will complement broader good governance efforts. The Department and USAID will strengthen efforts on corporate governance, accounting, and financial transparency. We also will strengthen efforts to combat corruption, including through the National Strategy to Internationalize Efforts against Kleptocracy, the Anti-Bribery Convention of the Organization for Economic Cooperation and Development (OECD), the UN Convention on Corruption, and the Extractive Industries Transparency Initiative (EITI). We will also strengthen bilateral assistance that improves transparency and reduces opportunities for corruption in customs, government procurement, and other public procedures. We will work to reduce pressures that contribute to illegal immigration and the trafficking of persons, narcotics, and other illicit products.

Trade and Investment: Increased trade and investment directly benefit American consumers, workers, and businesses. The rules-based trading system has been a principal driver of global economic growth since the end of the Second World War. More than 60 years of post-war history demonstrate that countries that remove barriers to trade succeed in raising growth and reducing poverty, while countries that remain closed are left behind.

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We will provide critical support in negotiating and implementing trade agreements and resolving trade disputes. We will also continue to negotiate civil aviation agreements, develop international communications and information policies, and pursue bilateral investment treaties that open new markets, support job creation in the United States, and provide important protections to U.S. investors.

The United States continues to seek successful completion of the WTO Doha Development Round of global trade negotiations. Our trade agenda is also focused on concluding and implementing state-of-the-art free trade agreements (FTA) that open new markets for U.S. agriculture, goods, and services and extend strong U.S. investment, transparency, and intellectual property protections abroad. We will continue to support programs linked to our FTAs, including support for labor, environmental, and governance activities, needed to ensure a level playing field for U.S. companies. We will ensure that trade capacity-building programs help developing countries participate in and benefit fully from global, regional, and bilateral trade negotiations.

Energy Security: We will enhance U.S. and global energy security by: promoting open and transparent, integrated, and diversified energy markets; encouraging appropriate energy-sector investments to expand access to energy and increase economic growth and opportunity; and developing clean and efficient energy technologies. Energy supply disruptions caused by hurricanes in the United States, disruptions in Russian natural gas supplies, and internal disputes in Nigeria underline the need for policies that strengthen energy security. We will intensify engagement with key producers to increase oil production and capacity and strengthen investment climates to facilitate U.S. oil investment in key resource-rich countries. Our diplomatic efforts in support of multiple pipelines for Caspian oil and natural gas will broaden the diversification of energy supplies worldwide.

Working with the International Energy Agency, we will widen engagement with key drivers of global demand in the developing world (e.g., India and China) on the need to build strategic petroleum stocks, enhance efficiency, adopt clean and renewable energy technologies, and accelerate market-based domestic policy reforms. In support of the President's 2006 Advanced Energy Initiative to develop alternative sources of energy and reduce foreign dependence, we will strengthen major international collaborations on cutting-edge energy technology research and development in biofuels and clean coal power generation, as well as hydrogen, methane, wind, and carbon sequestration.

Environment: Environmental issues such as climate change, protection of natural resources and forests, and transboundary pollution will continue to play a critical role in our diplomatic and development agendas. We will continue to promote a holistic approach to environmental issues in international fora, integrating our interests in conserving the planet's resources into our economic plans and activities. Transformational economic growth rests on a foundation of scientifically-based sustainable use of natural resources. In development programs, we build capacity, apply research, and promote technological improvements to foster more sustainable natural resource use and the conservation of biodiversity, and resilience to climate change impacts. Recognizing that 1.6 billion people worldwide depend on forest resources for their livelihoods, we will promote sustainable forest management, combat illegal trade in timber and timber products, and protect forest species endangered by overharvesting. We will promote partnerships for economic development that reduce greenhouse gas emissions, improve air quality, and create other co-benefits by developing markets to employ improved efficiency, conservation, and low carbon energy sources. We will continue working with our partners at the OECD to improve policies in industrialized countries while simultaneously supporting our developing country partners in their efforts to protect the environment.

Agriculture: The United States has strong political, economic, and humanitarian interests in supporting agricultural growth in poorer countries. We will support: agricultural trade and market systems that link producers to markets, add value to products, and increase rural incomes and opportunities; scientific and technological applications, including biotechnology, that harness new technology to raise agricultural productivity and provide a more stable, nutritious, and affordable food supply; local organizations that provide services and give political voice to producers; integration of vulnerable groups into development processes; development of human capital and institutions in and for agriculture; reduced negative environmental impacts; and natural resource management that contributes to rural sector growth. As women are the major food producers in many regions, we will work to ensure that women benefit from investments in technology and strengthening of markets.

U.S. Government Partners and Cross-cutting Programs: The following are key U.S. Government partners with whom we will coordinate to achieve this goal:

  • U.S. Trade Representative: USTR coordinates trade policy and trade negotiations.
  • Millennium Challenge Corporation: MCC is a key partner in the provision of development assistance.
  • Department of Agriculture: Agriculture is a key partner, particularly in provision of food aid, promotion of farm exports, and technical assistance for forest management.
  • Department of the Treasury: Treasury directs U.S. policy in the international financial institutions and cooperates on initiatives such as the Global Environment Facility.
  • Department of Commerce: Commerce works in support of U.S. businesses overseas and through the National Oceanic and Atmospheric Administration on marine resource issues, coastal zone management, and meteorology.
  • Other important partners include: Departments of Defense, Energy, Justice, and Interior; the Environmental Protection Agency; the Federal Communications Commission; the National Aeronautics and Space Administration; the Overseas Private Investment Corporation, the Export-Import Bank, the U.S. Trade and Development Agency, the Small Business Administration, the Peace Corps, and the U.S. Geological Survey.

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EXTERNAL FACTORS

The following are key factors, external to the Department and USAID, which could significantly affect the achievement of the goal:

  • Economic and environmental policies of major trading partners;
  • Readiness of other donor governments to implement the new development consensus;
  • Degree of foreign governments' commitment to economic reform and to engage in forward-looking dialogue on environmental and natural resource questions;
  • Economic, environmental, and social impact of a major natural or human disaster, such as a terrorist incident, oil spill, pandemic illness, or earthquake;
  • Degree to which protectionist impulses in many countries impede the expansion of free and fair trade and investment; and
  • Effect of regional political instability on price and security of oil supplies.


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